Why Did OM Crash? Latest Updates from the Mantra Project

According to the market data from Gate.io, OM The token is currently priced at $0.749, with a 24-hour decrease of 88%. Just yesterday at 4:00 PM, the OM token was priced at $6.35. Starting from 5:00 PM Beijing time yesterday, the hourly chart of OM has been continuously falling, but the decrease each hour is not significant; until 2:00 AM Beijing time today, the OM token plummeted by over 80% in a short time, dropping from $5.69 to $1.08; in the following few hours, OM dropped again to around $0.37. What caused the sharp decline of the OM token, and does the leading token in the RWA track still have a chance to return to the public eye?

Why Did OM Crash

According to Coinglass data, the total liquidation amount of OM across the network exceeded $72.94 million in the past 24 hours, with long liquidations accounting for $52.49 million. OM became the second largest token in terms of liquidation volume in the past 24 hours, second only to Bitcoin. According to Gate.io market data, the current circulating market value of the OM token is $703 million, a decrease of over 90% from its peak market value of $8.25 billion in February this year.

According to Lookonchain monitoring, before the big dump of OM (since April 7th), at least 17 wallets deposited 43.6 million OM tokens to CEX (valued at $227 million at the time), accounting for 4.5% of the circulating supply. According to Arkham’s tags, 2 addresses are associated with Laser Digital, which is a strategic investor of Mantra.

Some analysts have suggested that Mantra DAO’s token can be infinitely minted, seriously diluting its value, and there are too few validating nodes, leading to high centralization risks. The market confidence has collapsed, triggering a sell-off and a massive long liquidation, exacerbating the fall.

Mantra response

At 4:51 AM Beijing time today, after the OM token plummeted by more than 90%, the official X account of the Mantra project released a related statement, claiming that today’s abnormal fluctuation of OM was triggered by ‘disorderly liquidation’, which is unrelated to the Mantra project itself, and emphasized that the event was not caused by the team. The official statement mentioned that they are investigating the specific reasons and will release more details as soon as possible.

Mantra states that the timing and depth of the crash indicate that account positions were closed very suddenly, without sufficient warning or notification. This situation occurred during the low liquidity period in the early hours of the Asian time zone, which at least indicates a certain degree of negligence on the part of the CEX, or possibly intentional market manipulation.

“CEX partners play a crucial role in providing liquidity for projects like ours. We work closely with them, however, they still have a great deal of discretion. When this discretion is exercised without proper internal and external oversight, market distortions may occur, as recently happened, harming the interests of both the project and investors.

It needs to be clear that this market dislocation is not caused by the team, the Mantra Chain Association, its core advisors, or Mantra’s token investors selling tokens. The tokens remain locked and are subject to the announced lock-up period. The tokenomics of OM remain unchanged, as described in our latest token report last week. Our token wallet addresses are online and visible.

As of the time of posting (3:00 PM on April 14th, Beijing time), there has been no further investigation or explanation from the Mantra project team. The Gate.io blog team will continue to follow up on the latest developments of the project to provide feedback to all users.

OM Future Outlook

From the current situation, the future of the OM token is full of uncertainty and faces significant pressure in the short term. The token price plummeted by over 88% in 24 hours, reflecting not only serious doubts about its fundamentals in the market but also exposing major flaws in the project’s mechanism design and risk control. OM has been criticized for issues such as unlimited issuance, too few nodes, and high centralization risks, intensifying investor panic. In addition, key investors transferring a large number of tokens to exchanges in advance has sparked speculation about ‘insider trading,’ further undermining trust in the project.

Although the project team clarified that it has nothing to do with the big dump, without effective and transparent follow-up investigations, it is difficult to rebuild market confidence. If practical improvement plans and regulatory cooperation cannot be put forward in the short term, OM is highly likely to gradually marginalize from the leading project in the RWA track, and even struggle to shake off the market label of “collapse coin”.